Summary of this article
Gift deeds offer clarity but permanently give up control.
Wills retain control but may require lengthy probate.
Poor planning traps wealth and fuels family disputes.
We Indians take immense pride in building wealth. A home in our name, a piece of land our children can inherit, some money in fixed deposits, shares in a family business - these are seen as symbols of a life well lived. But when it comes to passing this wealth on, most people leave things to chance.
That’s not just risky - it’s what clogs up our legal system. Believe it or not, nearly 70 per cent of civil cases in Indian courts are about land and property disputes. And many of them could’ve been avoided with a little foresight.
So, here’s the big question:
Should you transfer your assets while you’re alive or leave them to be dealt with after your time?
Transferring While You’re Still Around
Let’s look at the option of giving it away now.
You can legally transfer your assets using a gift deed, a settlement deed, or by simply adding your family as joint holders or nominees. For property, a gift deed is the most common route. Say, for example, you want to give your apartment in Delhi to your daughter – you’ll pay stamp duty (6 per cent if you’re a man, 4 per cent for women) and registration fees. Once it’s done, the flat legally belongs to her. You can’t take it back. If she decides to sell or rent it tomorrow, it’s her call.
This is where many parents feel blindsided - they give out of love, but they don’t expect to lose control. Emotionally, it can be tough. Legally, it’s simple: what’s given, is gone.
When it comes to money in banks or investments, it gets murkier. Many believe that adding someone as a nominee or a joint holder means they will automatically inherit the money. Not true. The Supreme Court has ruled time and again - a nominee is just a caretaker. If the legal heirs are different, they have a right to the money, unless there’s a will to support the nominee’s claim.
That said, handing over assets while alive has one big benefit - clarity. You can explain your decisions, address concerns, and make changes if something goes wrong. In families where tension already simmers under the surface, this clarity can prevent years of messy courtroom drama.
But again, you lose control. Most gifts can’t come with conditions. You can’t say, “Here’s the flat, but don’t sell it,” unless you use a legal structure like a trust. And most people avoid that because it’s complicated and expensive.
Keeping Control, Transferring Later
Now let’s talk about the more common choice - holding onto your assets during your lifetime and passing them on after you’re gone. This is usually done through a will.
A will is simple, affordable, and can be changed whenever you want. It lets you spell out exactly who gets what. But there’s a catch - if your property is in certain cities like Mumbai or Chennai, or if the will is executed there, your family will need something called probate. That means taking the will to court and getting it validated - a process that can take months or even years.
If you don’t have a will, then things are decided by personal laws – Hindu, Muslim, Christian, etc. These laws don’t care who was closest to you or who helped you the most. As a result, they just divide your allocated assets as per legalities.
Courts follow paperwork, not memory.
Why Ignoring This Costs Money
Poor planning doesn’t just create tension. And, it leaves money locked up without many people actually knowing about it.
As of March 2024, banks in India have a corpus of over Rs 78,000 crore in the form of unclaimed deposits. Mutual funds are holding more than Rs 3,450 crore in unpaid redemptions and dividends. Most of this isn’t because people didn’t have heirs - it’s because names didn’t match, nominations weren’t made, or no will was written.
In such cases, families need to apply for succession certificates, post newspaper notices, file affidavits - a slow, frustrating process that can drag on for months. Meanwhile, the money stays stuck.
So, What’s the Right Way?
Transferring assets now gives peace of mind but takes away your ability to change your mind. Waiting gives you control, but risks creating confusion later.
There’s no one-size-fits-all answer. But there is one simple truth: Don’t postpone the decision. Make a plan, and revisit it as life changes. If you want to transfer now, understand the finality. If you choose to wait, write a clear, updated will. Don’t rely on conversations or verbal promises - the law doesn’t recognise them.
In India, wealth succession isn’t just about passing on money. It’s about protecting your family from our legal system. And that, by itself, is reason enough to act – not tomorrow, but today.
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
